OREANDA-NEWS. March 15, 2010. OJSC Krupskaya Confectionery Factory has signed an agreement to acquire LLC Peterhof, a leading producer of chocolate paste spreads and biscuits. The deal will be completed following approval by the Federal Antimonopoly Service.

Krupskaya has signed an agreement to acquire 100% ownership of LLC Peterhof, including factory, production equipment, and trademarks. Peterhof has a leading market position in chocolate paste spreads under the "Academy of Chocolate," "Vkusnyitsa," "Djenilla," and the "Smeshariki" brands. Peterhof is also a producer of biscuits under the "Day by Day" brand, and instant porridge under the "Vkusnyetsa" and "5th Element" trademarks. Peterhof has annual net sales of approximately USD 17Million, while Krupskaya’s 2009 annual net sales were approximately USD 88Million (Data is provided on the basis of IAS). Located in the Lomonosov District of Leningrad Region, Peterhof employs 450 people; most of whom will be retained by Krupskaya after the acquisition is completed. The parties have agreed not to reveal the financial details of the transaction.

"Orkla enjoys market leadership in chocolate paste spreads in Norway under our „Nugatti“ brand," says Krupskaya General Director, Philip Wegh. "This is a category where we have competence, and can grow the value of the Peterhof brands in Russia."

"The biscuit production of Peterhof will complement Pekar’s wafer and sponge cake portfolio, and eventually we may want to relocate all our flour confectionery production to the Peterhof facility, which has room to expand," says Philip Wegh. "We have to study the energy capacity requirements before taking a decision to relocate Pekar production to Peterhof, and in any case, relocation would not begin any sooner than September 2010." Krupskaya currently rents part of the production facilities from OAO Pekar under a long-term lease agreement.

Confectionary factory named after N.K. Krupskaya founded in 1938, today is one of the leading confectionery enterprises in Russia specialized in chocolate products production. In 2009, Krupskaya acquired the brands and production equipment for Pekar branded wafer cakes, and Azart branded caramel and dietary products. The company is overall confectionery leader in Northwest Russia. In 2006, Krupskaya was acquired by the Norwegian company Orkla, which is one of the largest listed companies in Norway. Orkla Brands is a leading supplier of branded consumer goods to the Nordic market, and with strong local positions in Russia, India and parts of Central and Eastern Europe. Krupskaya employs 1,000 persons. Krupskaya Factory posted 2009 operating revenues of 2,769 million rubles (USD 88 million). Krupskaya sales in 2009 showed +23% growth over 2008.